Pricing and Costs of Auto Finance

Determining which business auto loan is right for you

Automobile financing is a necessary expenditure in most businesses. Having an affordable vehicle is important, but it is often more important to have the best financing for your situation. Interest rates play a significant role in the eventual vehicle cost.

When choosing auto finance companies, business owners need to look at the immediate and long-term costs of the financing. Comparing options in finance allows businesses to lower expenses and get a reliable, quality vehicle for employees and business owners to use. When buying a vehicle, first consider the following:

1. Look for the lowest priced vehicles meeting needs, with an eye on fuel efficiency and low maintenance costs.

2. Invest in auto finance lenders offering low interest rates.

3. Consider putting a sizable down payment on vehicles to lower interest in the long term.

Know auto finance costs in new versus used vehicles

Purchasing new or used vehicles is an option for most businesses. The outright cost difference for used vehicles is lower, but these vehicles may offer a shorter lifespan to the company. A used auto finance company's loans may require an appraisal to insure the value of the vehicle. Costs for used cars can be up to 50 percent lower than new vehicles.

Notice the automobile finance costs

As you look for the right auto finance company, take note of all costs relating to the investment. Finance costs include the cost of the vehicle, ranging from $10,000 up to $50,000 or more for new vehicles. Trucks and vans can be more. Interest rates can range from six percent up to nine percent, but change often. Closing costs can be one-to-three percent of the sale price.

Find auto financing companies specializing in commercial fleet financing

Fleet financing is an option for businesses that need a large number of vehicles. An automotive finance company may specialize in larger fleets, but some companies offer financing to small- and medium-sized businesses. Fleet costs are usually more affordable to the business in the long term, as interest rates may be more affordable. Fleet leasing may also be an option through several of the auto manufacturer's financing companies.

• Look for auto finance online. Many of the finance companies offer online quotes for businesses. This is one of the best ways to compare the pricing and costs of auto finance.

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